Southern California home prices hit highest level in nearly 5 years

Home prices in Southern California popped to their highest level in 58 months during April while sales hit their highest level for that month in seven years, market tracker DataQuick said Tuesday.

It's another sign the recession-battered market continues to build momentum.

"This is definitely good news. The bump up in sales is probably the most significant piece of information that comes out of this," said Robert Kleinhenz, chief economist at the Kyser Center for Economic Research at the Los Angeles County Economic Development Corp. "I think this is shaping up to be a good year for the L.A.-area housing market."

Last month sales in the six-county region increased 9.5 percent to 21,425 properties from 19,562 a year earlier in response to pent-up demand and investors mining the market, La Jolla-based DataQuick said. Sales also increased 4.1 percent from 20,581 in March.

Sales were the highest for the month since 27,114 sold in April 2006.

In April the median price of new and used houses and condos increased 23.1 percent to $357,000 from $290,000 a year earlier. And it was up 3.3 percent from $345,500 in March, DataQuick said.

Last month's median was the highest since June 2008, when it was $360,000.

Prices have now increased on a year-over-year basis for 13 consecutive months, and those gains have been double digit, between 10.8 percent and 23.5 percent, since this past August.

But April's median was 29.3 percent below the peak $505,000 in the spring and summer of 2007.

"This is a market that is still re-balancing. Sales of deeply discounted properties in affordable neighborhoods are way down. Activity in middle and high-end communities is on its way up," DataQuick President John Walsh said in a statement.

"Now it's catch-up time, with a healthier economy spurring more demand and rising prices tempting more people to put their homes up for sale."

Sales and prices increased from a year ago in all six Southern California Counties. DataQuick said that:

• In Los Angeles County the median home price increased 27.4 percent to $395,000 from $310 a year earlier. Sales rose 9.7 percent to 7,140 from 6,510 a year earlier.

• In San Bernardino County the median price increased 24.8 percent to $195,000 from $156,250 in April 2012. Sales increased 9.6 percent to 2,512 from 2,292 .

• Riverside County's median increased 24 percent to $248,000 from $200,000 a year earlier and sales increased 8.1 percent to 3,760 from 3,477.

This is a good sign, too, Kleinhenz said.

"The people who are getting loans now are very high-value borrowers. We are not sowing the seeds of a future housing market bust like the one that led up to the great recession."

April's report illustrates the shift taking place in the market's dynamic.

Well over half of last month's year-over-year price increase reflects rising home prices, with the balance reflecting the change in market mix to higher priced homes selling as distressed properties are flushed through the system.

Last month sales rose 35.4 percent from a year ago in the $300,000 to $800,000 price range, which would include many move-up buyers. The number of homes sold for $500,000 or more jumped 52.7 percent from one year earlier and was at the highest level in just over five and a half years. Sales of $800,000-plus homes increased 51.4 percent year-over-year.

Foreclosure sales, homes foreclosed on in the prior 12 months, accounted for 12.4 percent of the Southland's resale market last month, down from 28.8 percent a year earlier. April's foreclosure sales total was the lowest since 10 percent in August 2007 before the Great Recession swept over the country. In the current cycle, foreclosure resales hit a high of 56.7 percent in February 2009, DataQuick said.

Short sales, transactions where the sale price falls short of what was owed on the property, made up an estimated 17.7 percent of Southland resales last month. That was down from 24.3 percent a year earlier.

"There is still a lot of money in the move-up market and people were able to find inventory," DataQuick analyst Andrew LePage said. "There's years worth of pent-up demand for people who wanted to buy above $500,000 but they were either concerned about their jobs or the economy or the housing market. A year ago a lot of people were concerned that the market hadn't hit the bottom but they are now confident the market has stabilized."